Android Sales SkyRocket, Surpass iPhone

Sales of smartphones based on Google's Android OS have skyrocketed this year, both in the US and worldwide. And Android has now outsold Apple's iPhone for all of 2010 so far.

According to Canalys, Android unit shipments are up an incredible 886 percent, year-over-year, worldwide, compared to 61 percent for Apple's iPhone and roughly 41 percent growth for both Symbian and RIM (both of which outsell Android and iPhone). Android is now the number three smartphone platform in the world, with 10.7 million units sold in Q2 2010. By comparison, Nokia's Symbian posted unit sales of 27 million in the quarter, while number two RIM had 11.2 million. (Fourth place iPhone posted 8.4 million sales.)

The situation in the US is a bit different overall, because Symbian isn't a major player in that market. But the results for Android and iPhone are similar, with Android taking second place with 27 percent of the market, compared to the iPhone's 23 percent share. However, Android is on a sharp upward trajectory, and iPhone is on a sharp decline. (The number one smartphone vendor in the US, RIM, controlled 33 percent of the market by the end of the second quarter of 2010 and is falling slightly.)

Saying that Android and the iPhone have switched places this year is a disservice to Android's meteoric rise. While Apple has shed market share steadily all year, falling from 34 percent of the market at the end of 2009 to 27 percent in Q1 2010 and then to 23 percent in Q2, Android has skyrocketed. The platform started the year at a paltry 6 percent, and saw its market share rise to 17 percent in Q1 and then 27 percent in Q2. Even Windows Mobile, widely considered an also-ran, has lost share far less dramatically than has the iPhone this year. (It fell from 13 percent of the market at the end of 2009 to 11 percent at mid-year.)

But wait, the Apple-friendly media always likes to point out at this juncture, these sales don't include the first full quarter of availability of Apple's latest iPhone model, the Titanic. (Excuse me, the iPhone 4.) Actually, these figures do include most of the stellar sales Apple has already reported. And those sales—about 1.7 million worth—occurred before the iPhone 4's endemic problems were widely reported. (It should also be noted that while most Android sales are to new customers, almost 80 percent of iPhone 4 sales are to previous iPhone users.)

The point here is simple: Android will handily outsell the iPhone this year, both in the US and around the globe, and it will almost certainly be the number one smartphone platform in the US by the end of 2010 and the number two player, behind Symbian, around the world. In fact, if you buy into the argument that Nokia's Symbian platform doesn't even meet the definition of a modern smartphone OS, as do I, then Android simply becomes the dominant smartphone platform this year, period. In fact, it's only a matter of time.

The key to Android's success is two-fold. First, Google is innovating at a much faster rate than is Apple, with Apple moving into a maintenance/protection mode with its iOS platform and no longer offering the sharp improvements it did early on. Second, unlike the iPhone, Android is available from a wide variety of hardware makers and is thus sold via almost every major wireless vendor on earth. This provides consumers with more choice.

Microsoft is pursuing an interesting hybrid strategy for its upcoming Windows Phone platform. While the company will retain an Apple-like level of control over the hardware components that go into each device and the software capabilities and future updates, it is allowing numerous vendors to sell multiple devices on multiple wireless carriers, like Android. Microsoft's hope is that this best-of-both-worlds strategy, combined with innovations in the Windows Phone software itself, will provide the company with an inroad to what is clearly a dynamic and lucrative growth market.

So if this is all about market saturation, why does Paul never mention the percentage of new customers using OS X and buying a Mac? He will calculate their exact market share to 2 decimal places, but never makes any mention of the percentage of new users. Why would that be?

@tayme

I don't want Penton to let Paul go. This is such great entertainment. Kind of like what you said earlier.

Android is just what you get when you cant get a iPhone....Its just the next best thing....Im on sprint I want a iphone but im locked in ill get a Android. I hate AT&T cant switch now I get a Android...

Thats why its selling..If Apple was on every network do you think Android would be doing so well?

Like i said its just the next best thing..

So keep pumping the number you know in time apple will be on other networks and alot of Android user will dump the next best thing for the real deal.....The iPhone!!!!!

This is just a deliberate attempt to negatively characterize an amazing number of sales in a three day period.

Where is the rate of repeat sales for Windows mobile phones? My guess is that would be an even higher rate of repeat customers, so that is just ignored.

This is what Paul does. He takes anything good about Apple and tries to make it sound negative.

20% of all iphone sales occurred in the last 3 days of the Quarter. Instead of doing real analysis about the market, he just spins it negatively for Apple. But anyone with any understanding of business knows you need to look beyond those basic numbers. Apple sold another 1.3M iphones in the first few weeks of Q3. There is still a 3 week lead time on a new iphone orders. Its six weeks from the launch date and they still can't keep up with demand.

I find it amusing watching the simple minded Apple Brand Loyalists fall all over themselves trying to cover-up the fact that Android is doing well as a platform. It reminds me of how the simple minded Microsoft Brand Loyalists do the same regarding the Macintosh and OS X. When will people realize that people are different and what works for one, does not work for all. Think Different, indeed!

The sample size is not the issue. The representation is. The iPhone was released internationally and there is not international sampling. The sampling represents three cities in the U.S and a single reseller.

It would have all the same validity of Presidential polling done in the just the same three cites (SF, Chicago and NYC). Sample size is not enough, it has to be a representative sample.

I am not saying everyone wants it, and personally I think the sales are great. What I am saying is Paul is showing complete intellectual dishonesty is using that number. First he never cites it. At reading the article you may well think it was something that was released by Apple or ATT but it isn't. It is a one day number that isn't representative of the actual iPhone buying public. He also rounds it up without mentioning that he is doing so and promotes it as if it were current.

It is simply dishonest and if someone else where to do the same thing with respect to a company he likes he would call them a liar and accuse them of not doing basic research.

I am not sure if Tayme's comments were meant for me. I do not deny Android's numbers. They are in and ahead. Kudos to Google, that was no easy feat.

"I have been inside similar testing facilities in Japan, Korea, and the Midwest. Apple's setup was that most sophisticated I have ever seen. This fact was driven home for me when an executive from another handset company told me that, at first, his company was elated that Apple had made such a "misstep" with the iPhone 4's antenna.

However, once the company realized that Apple had actually created a real breakthrough with its latest antenna design, the joy was short-lived. That fact became even more clear during subsequent conversations with two other top-notch antenna designers. They told me that Apple's antenna is best-in-breed and predicted that other manufacturers will be forced to try to match it in the future."

- http://www.pcmag.com/article2/0,2817,2367211,00.asp

Yes, they left a much bigger weak spot, but it appears, that the design is superior.

" well, they aren't and that is a blunder that Apple made that is even bigger than Antenna-Gate. "

You need to go back and study your history.

The exclusive contract was the price Apple had to pay for complete control over the design of the OS and the phone. Without Apple taking that bold step, and locking themselves in, there would be no iphone. Without the iphone there would be no modern smartphone as it was today. The original Android phones were nothing like they are today, and that is due to the iphone.

Apple paid the price so the entire industry could jump forward. Not that Apple has been hurt by this, they have made billions of the iphone. So calling it a blunder, is really an short sited way to look at it.

You're the guy who uses, "intellectually dishonest", "liar". and "dishonest." Pretty much multiple times to attack the author. Considering I'm guessing you're not even a Windows IT professional (on a site for them), barging into another guy's house and calling-him-out, you don't find that a little confrontational to begin with?

You can't compare the RMS Titanic and the iPhone 4! As they say in Belfast, "It was fine when it left here." unlike the iPhone4, it was built just fine. The RMS Titanic suffered from what now is referred to as a 'User error'.

Apple - Form Over Functioning.

Gutierrez that's a big if. If the iPhone was on every network, but it's not, is it? Then you follow it with a vague promise. Or are you really being sarcastic?

The success of Android should really be more detrimental to Microsoft than anyone else. What Paul isn't saying is that Win Phone 7 will be competing directly with Android on the same maker's phones. Those makers having to licence WP7 as opposed to getting Android for free.
Apple meanwhile, can compete on innovative software, leading edge design and the huge industry already existing around the iOS platform.

Security is also going to be a huge issue for Android, being effectively the 'Wild West' of mobile, whilst Microsoft have learned something about security from Apple, effectively having a similar closed system.

Why the heck would Paul report repeat purchase percentages of WinMo??? That's a total waste of words. The platform is in decline, the whole planet knows... Thus the re-buy percentage is probably 99.9%. I seriously doubt they're getting *any* converts right now, and on top of that a lot of people using it are leaving. That's not obscure knowledge.

Apple on the other hand gets a lot of positive press which is disconnected with the rest of the business universe. They're a fine company, but they screw up like everyone else. When 80% of your early sales (regardless of the time-slice) go to existing users, there is 20% good news in that information. It means, without fail that your market saturation is getting closer because you're serving the *same* customers... The exact saturation point is unknown, but they will edge closer with each subsequent generation. User satisfaction is critical for re-buys, thus I expect high percentages from them given their volumes, but you also need to have non-customers in line to maintain growth.

The only way to keep growing is model-line expansion. Add a slide out keyboard model, or even a nano that flips. Whatever... It's naive to assume a single model is going to meet the needs of most people. These aren't tube socks. You'll also get a lot of people like me, who just refuse to buy the same thing 50 million other people use because I enjoy the fact I'm unique. I'd drive a Camry if I was big on following others.

"It should also be noted that while most Android sales are to new customers, almost 80 percent of iPhone 4 sales are to previous iPhone users."

The only people who would know this are the carries and Apple. None have released this information, but it fuels Paul's fantasy of Apple failing so he just repeats it over and over as if it were some known fact.

So, I point out that Paul rounds a number up to help bolster his point and applies a U.S number internationally and that means I have blinders. Okay, I have blinders. Thanks for engaging in productive debate, ohhh wait you you jumped in and attacked me rather than address my points. Nevermind.

"but does google make a profit small or big on Android ? I read they license it for free?"

I don't believe there is a direct profit, but that's not really formally disclosed. More than likely the OS is free, but Google gets "consulting" revenue for helping with the device implementations. Android is a "free" OS, but there could be royalty payments for commercial usage (not sure -- it depends on the contracts).

Their primary income source is volume, like everything else... Give them a portal for Google services and advertising and they'll make money on it.

If I had to guess their business intention, I'd say they figured writing an OS was the cheapest way to make sure people used their services... So I bet it's just a write-off. The bigger trade-off is that 10 years from now you've got hundreds of millions of people with Google ads beamed directly to their pocket.

Just Curious and I know its early in the game but does google make a profit small or big on Android ? I read they license it for free?

I love my iPhone 4 and i think its great that Android is doing good it will keep apple sharp in the game...IMO and im probably wrong but i think more Android users will switch to the iphone is given a chance not sure iphone users would do the same. Just my opinion...

1
the line Apple - form over functioning, is a poke at Apple. They make nice make glossy ipads which are so reflective you can use them to shave with, keyboards that show no concern to ergonomics. Their mice which infamously only had one button, and not very comfortable to use, some ipods which had a tendency to burn holes in pockets and now a phone which needs a rubber band to ensure it works correctly.

Or, you could do something radical like send 100 people to stand outside stores and question buying habits. How exactly do you think they can declare the next President days before they tally all the votes? Sure, there is a margin of error, but we're not talking more than a few percent when you have a thousand-user sample-size.

Why would Paul mention such a thing? Isn't the answer entirely obvious and self-evident? Gee, it's going to be almost 100%. When you have 95% of the market, guess what... You're saturated. The only way MS could ever expand unit-volume is for the average number of PCs/person to skew upward. Otherwise the best they can hope for is 100% replacement of an OS, with each new iteration, but that's an unrealistic expectation.

It's a relevant number for the iPhone because at some point, everyone who wants one is already going to have it and each susequent generation will sell at most as much as the prior. Given their stubborn single-model strategy, it will saturate at a lower level than other products. Flip phones are the most popular form factor in the world... Nope, none of those. >70% of all the smartphones in service today have a hardware keyboard. Nope, none of those either. 7000 models of TV exist, because at some point people like options.

(It should also be noted that while most Android sales are to new customers, almost 80 percent of iPhone 4 sales are to previous iPhone users.)

What does this have to do with anything? If selling to existing customers is such a bad thing, WHY DON'T YOU REPORT THE SAME THING WITH WINDOWS 7 SALES? What percent of the 175M Windows 7 licenses went to existing users of Windows? Suddenly that is no longer an issue? Why do mention is every time you write about iphone sales, but not for anything else?

"The key to Android's success is two-fold. First, Google is innovating at a much faster rate than is Apple, with Apple moving into a maintenance/protection mode with its iOS platform and no longer offering the sharp improvements it did early on"

News flash, Apple innovates on TWO aspects of the iphone, the hardware and the software. Apple's screen is far and away the best one available on any smart phone. But you like to pretend that does not exist. Nor do you think about the software innovation of the first resolution independent smartphone OS.

Can you answer me why Paul never bothers to find out what percentage of Windows 7 users are repeat customers? Why is that not important when reporting the sales of Windows 7? The only thing I can think of it he is spinning this in an effort to make the iphone look bad.

Nothing about how Jobs and Balmer have respectively run their companies? My post was in response to the usual nonsense about Jobs ruining Apple, when he was the one most responsible for its turn around. Just as Balmer is responsible for Microsoft's lack of progress in every new area they get into.

Nothing about reporters being objective and providing the same approach to everything? Just nonsense about the iphone not running Flash and the Mac being irrelevant. The Mac has more influence over the look and feel of Windows than anything else. I guess that does not amount for much in your book.

I guess Robinson is right. You are not really responding to any arguments being made.

Uh, no... Apple mobile devices are locked down and consumer electronics. They are not computers, or anything remotely like a computer... Seeking a way to maximize Apple profits they deliberately limit choices. Forcing users to abandon Flash, alternative browsers, etc, has definite ramifications for Internet usage. The damage they impose upon unsuspecting users is an important news item.

A Mac is a computer, it can run in exactly the same way as a Windows PC. What happens to the Mac has no relevance on broader computing unless they decide to similarly limit applications and forcefully limit what users can do with their purchases.

Given how you can run Flash on everything but an iPhone, this is actually, how do you say it? Ah, important.

"Do you prefer Steve Balmer?"

Yes, because he's a decent human being. The other guy you mentioned is widely known as being one of the most self-centered people in all of business. I'd actually respect the company a *whole* lot more if he were gone and had nothing to do with it.

"Paul did not write that it was estimated that 80% were to existing users, he presented it as a hard fact, which it is not."

When I see the President's approval rating on TV I know it's an estimate. Even WSJ and NYT articles, arguably the gold-standard or journalism, don't go into such detail unless the data is charted in a sidebar.

The original publication was Fortune magazine...
http://tech.fortune.cnn.com/2010/06/25/77-of-iphone-4-sales-were-upgrades/

Just a few weeks ago, you personally were mentioning the CR blog article where they said the antenna was "much ado about nothing." The problem is that they admitted to doing no lab-tests. So why exactly can you quote that blog as gospel, sans any experimentation, but a published study from Fortune is meaningless garbage? I'm not following your rationale.

That being the case, I do believe it will eventually be a barn-burner product. It's not impolite to say there are teething issues (both physical and perceptual).

Heck, I enjoy MS products, but WP7 will probably be a disaster. They should have resurrected the SideKick brand, and spent money to make it more "adult" (and even that wouldn't take a lot -- the original device is too obscure for most people to remember). On the face, "Side Kick" means a lot more in regards to mobile communications and experiences. Palm was a great name for the same reason, Android is brilliant since it oozes tech and symbiosis.

I wonder if MS has any marketing positions, where one could be highly compensated, and just walk into meetings and tell everyone they're a bunch of misguided people disconnected from humanity.

I, for one, just want to say that I have small genitalia and coming on this site to argue against this author regardless to what hes writing about, truly makes me feel better about my lack of "authority" in the bedroom due to my previously mentioned penile deficiency. After seeing these comments day after day, I just want to thank you for fighting the good fight with me, it really makes me feel like I have finally someone out there who knows exactly how I feel, and for the briefest of time, I forget about my unfortunate lacking in my pants. So, 1 and everyone else just like us, dont ever stop, dont let those others prove us wrong with silly logical and reasoning, because we mustnt forget we have a great goal a head of us; if we keep coming to this site and berating this Thurrott fellow, maybe just maybe someone will give us the attention we deserve, and the evil Thurrott will be slain; Then and only then, may we finally forget about how woefully inadequate we are sexually. So stand up, and be proud, and join me in our chorus:
Were here! Were inadequate! And well continue attacking anyone who doesnt share our exact views of topics that have no relevance in the real world, but we ignorantly keep fighting for them, because if we gave into reason and got a real life that made a difference in the world, then we would have to admit we arent as important as we think we are, and thus realize were only doing this because of our own insecurities about our inadequacies! Get used it!

"Can you answer me why Paul never bothers to find out what percentage of Windows 7 users are repeat customers?"

Obvious - To get all of you SMBL riled up and posting on this site. That's his job. If you really don't agree with it, the best way to end it is to quit coming here. If there is no proof of readership of Paul's articles and columns, do you really think that Penton is going to keep him around? Geez - is it that hard to understand?

@Gutierrez - YOu may be right...but waht is important is that Android is selling and establishing it's own "lock-in" that is outside of Apple's ecosystem. Many, dare I say most, of those people that are "settling" for an Android phone have owned or at least used an iPod and know how that works - and are finding out that Android does a lot of things much better than iPod/iPhone.

A lot of people like to point at the fact that in the US the iPhone is only on AT&T and say things like you did about if they were on multiple carriers - well, they aren't and that is a blunder that Apple made that is even bigger than Antenna-Gate.

"The number is crap, but it supports Paul's world view so it is repeated."

Just what sample size do you want? I hate to break it to you, but their sample-size is about the same that news organizations use w/5% MOE for their polling.

Seeing as how they have only 1 model, you don't think they have a vastly lower peak-market saturation than their competitors? Do you really think 100% of the population wants to own the exact same device as everyone else? Ever go car shopping? The fact they've hit the 20%+ mark with one model is incredible on that basis alone.

Paul, I have a Nokia with Symbian S60 v5 on it, it has a free turn by turn satnav, I can use Google Earth including streetview or Ovi Maps, it reads pdf files and Office files, does flash, has folders, can cut n paste, has a radio, an accelerometer, takes pictures by pressing one button like a new windows 7 phone, has a flash for the camera - which doubles as torch. I can easily upload shots to facebook or flickr. I can browse the internet using 3G or wifi with several browsers if I choose, I can easily access all my email accounts from one place. It plays video in widescreen format and has stereo speakers.It has access to Ovi, Nokia's app store, not brilliant but some are outstanding, I can also download apps from other vendors. I even watch Leo's netcasts on it from youtube, or at a pinch find out when the next bus or train is coming along. I can listen to many audio formats with it. It maybe a two year old touch screen design with a recent software upgrade. However you can hold it anyway you like, and I can do video calls with its front facing camera without wifi restrictions. It may seem slow compared with more recent phones but that is the nature of the beast. Yesterday I put a fitness tracker on it which measures distance, heights and every step I take. Its also a phone. It does voice recognition and even handwriting recognition. The face proximity sensor actually works. I can switch between open apps - I had 9 open once. It has Skype too. etc, etc, etc...

you can't help but to laugh at this news because that's exactly what happened to apple when it lost the PC wars a few decades ago. They were first, had all the momentum, but once again steve jobs ego got the better of him and they were outdone by a competitor that took over the market steve jobs dissagrees with in principle.

If you haven't shorted apple stock, they may be a good time.

the question is what will apple do now that it's empire is starting to fall. macs are failing and will never catch up to windows. they have no software sales that can be as lucrative as the smartphone market was. they have no cloud strategy. apple tv failed. the ipod is in decline now that all these android smart phones are essentially mp3 players. They have no enterprise/business product line they can at least retreat to...I guess they can just remain the 10% of the market for phones too just like they did for computers and still be making enough money to hope to jump on the next big thing. Maybe apple is more like microsoft and it takes 3 times to get it right. And they just might since chances are steve jobs will have been put to pasture by then.

Actually the data is more-telling depending on how you read it... Paul's interpretation is actually conservative.

http://www.dailytech.com/article.aspx?newsid=19237

DailyTech basically says, as of today, Android is outselling *everyone*.

As much as I dislike Google, good for them for making a platform that can be tailored for different users. Microsoft, I have no idea who they think their target is...

I also wonder if they're going to buy any TV commercials. Seriously, those twits, in about 10 years of WinMobile, have never had one commercial that I can ever recall. Here's a big hint -- if you have a product, never buy *any* time on TV, no one is ever going to buy it.

Frankly they should have just called it "Microsoft Phone." A consumer has preconceptions when they hear the word "Windows". Windows Mobile was Windows-like, so it made sense. This new UI seems nothing like Windows -- people respect the brand *for work* but that's not proper for a phone, ever. The Zune brand is also total garbage. It sounds like a disease. I have no idea how that got through their marketing department... "Gee guys, Zune sounds like something you treat with penicillin. Maybe we should go back to step A."

"First off this isn't a Mac site. The Mac does not define anything... Their mobile initiatives are much more prominent. A PC at home, is a commodity good, different OS, whatever, they basically do the exact same thing. You could put a PC, Mac, Linux in people's homes, and they all check email and surf the web just fine..."

No this is not a Mac site, or an Apple site, yet Paul goes out of his way to constantly talk about them. The point is the Paul does not apply the same standards to Apple and their products as he does to other companies.

You can argue all you want about the purpose of this site, and what is relevant. But a smartphone, tablet, PC or whatever can all be commodity goods based on your definition. They all check email, surf the web, play music, etc. If something applies to one, then it should apply to the other. That is balanced reporting, and is not what happens here very often. For some reason you seem to not be able to grasp that, or just prefer the bias.

S

"the question is what will apple do now that it's empire is starting to fall. macs are failing and will never catch up to windows."

I guess you missed the past quarter where Apples sales of Macs were their best ever. Yep, that is failing.

Laugh all you want about Steve Jobs. Do you prefer Steve Balmer? Which one has real vision and can create new products that generate profit? What new profitable businesses has Balmer been able to lead Microsoft into? That is why Apple stock is worth so much. Microsofts profits come from the same place they always have (Windows, Office, Sql). Every new venture they have gone into has not made them money (Xbox, Bing, Zune). Apple has been able to create many new areas of profitability while still making money on their original area.

Carrying a phone that 50 million people carry, and isn't customizable in any meaningful sense is a far gap from a computer where I control every single component of hardware. With the exception of a laptop CPU fan, there are *no* moving parts in any of my workstations. OEMs don't let you do that.

The phone situation is more like a watch company selling one model and saying, "It's impossible to need anything other than this model, you better like how it looks." Well gee, I don't, too many people wear the same thing, and I don't enjoy pretending to be a clone of 50 million people.

Given the huge choices of BlackBerries, Win Mo, and Android phones, it's easy to find something that does precisely what someone needs. And you don't have to throw individuality out the window.

"why does Paul never mention the percentage of new customers using OS X and buying a Mac?"

First off this isn't a Mac site. The Mac does not define anything... Their mobile initiatives are much more prominent. A PC at home, is a commodity good, different OS, whatever, they basically do the exact same thing. You could put a PC, Mac, Linux in people's homes, and they all check email and surf the web just fine...

If Apple wants to be tyrannical about Flash on iOS -- and they take over the mobile market. Well, that's important news. If iOS has stagnated, that's actually somewhat positive in terms of Flash penetration.

"It is simply dishonest and if someone else where to do the same thing"

Really, quoting *Forbes* is dishonest? Seriously, take off the blinders -- it was bad news compared to prior data-sets of the exact same period. The trend is obviously indicating a march towards saturation. One can't figure out the saturation point from the data, but it's statistically obvious that the potential pool of buyers is shrinking.

Yes, because standing in front of Apple stores in three U.S cites on the day of an international launch is wholly scientific. The number is crap, but it supports Paul's world view so it is repeated. Over and over. Kind of like when he said that I'm A PC commercials were working and stopping Mac growth. In fact he said it was "Demonstrable" except it isn't and they aren't. Facts don't mean a whole lot to Paul.